Provisions of more than €400 million against personal injury claims relating to the antipsychotic drug Risperdal dragged a Cork-based subsidiary of pharma giant Johnson & Johnson (J&J) into the red last year.
Accounts lodged by Janssen Pharmaceutical Sciences Unlimited record pretax losses of €296.15 million for last year compared with a profit of €155.48 million in the previous year.
The company’s revenues declined by 18 per cent – from €714.33 million to €587.4 million – in the 12 months to the end of January 3rd, 2021. During the year, the company paid out a dividend of €100 million to Janssen Pharmaceutical.
Owned by US-headquartered J&J, the Irish unit had been on course to make a profit before having to make a net provision of €418.34 million in response to personal injury claims over Risperdal.
A note attached to the accounts said that the firm sold Risperdal to other affiliate companies who made the trade sales. The accounts noted that lawsuits have been filed against the affiliate firms in the United States and Canada but that Janssen Pharmaceutical Sciences Unlimited bears the product liability risk.
The company has been making provisions against Risperdal sales over a number of years but only at a fraction of this year’s level.
A separate note discloses that last September, J&J entered a settlement in principle concerning all outstanding Risperdal claims in the US. J&J has been dealing with lawsuits filed by thousands of men who claim the drug – used to treat schizophrenia, bipolar disorder and, in children, symptoms of irritability in autism – Risperdal caused them to grow breasts.
The period covered by the accounts includes the early phases of the Covid-19 pandemic. Directors said sales fell “due to the decrease in demand experienced in nearly all product categories”.
However, in a report accompanying the figures, directors said the pandemic did not have a significant impact on business to date, though they cautioned that it could cause a risk to the company’s supply chain in the future.
Numbers employed by the firm last year increased from 412 to 446 and staff costs increased from €54.82 million to €60.16 million.
The bulk of the company’s sales last year – at €474.3 million – occurred in the European, Middle East and Africa (Emea) region.
